Nirav Modi impact: RBI scraps letters of undertaking for import trade credits

PNB fraud Nirav Modi allegedly managed to get 1,212 LoUs- which the RBI has discontinued now- in 74 months

The CBI has alleged that firms controlled by diamond traders Nirav Modi and his uncle Choksi obtained fraudulent LoUs and letters of credit (LCs) worth Dollars 2 billion (Rs 12,636 crore) from PNB in connivance with bank officials.

The RBI added that the aforesaid Master Direction will be updated to reflect the changes.

Meanwhile, PNB has again come up with an additional exposure of about Rs 942 crore in the country's biggest bank fraud case.

Punjab National Bank (PNB) reported fraudulent issuance of LoUs/ Foreign Letters of Credit for payment of import bills and fraudulent transactions in accounts, amounting to Rs 12,967.86 crore, to the RBI through its fraud monitoring reporting system.

"Reserve Bank of India (RBI) has apprised that it had issued two circulars to banks in the months of August and November 2016, related to security and operational controls in the SWIFT environment", minister of state for finance Shiv Pratap Shukla told the Rajya Sabha in a written reply. By giving LoU, PNB agrees to repay the principal amount and interest on the clients (Nirav Modi) loan unconditionally.

Hess Midstream Partners (NYSE:HESM) Raised to "Hold" at Zacks Investment Research
Goldman Sachs Group Inc. boosted its position in Martin Midstream Partners by 107.5% during the 4th quarter. (NYSE:TER) shares. Bessemer Group Incorporated, a New Jersey-based fund reported 2,000 shares. 5,780 are held by Manufacturers Life Insur The.

However, letters of credit and bank guarantees will continue upon meeting certain conditions, the central bank said in a press statement.

PNB, the second largest state-run bank, had on February 14 informed the exchanges of detecting Dollars 1.77 billion fraud at its Brady House branch in Horniman Circle area of south Mumbai and named the firms led by Modi and his uncle Mehul Choksi's Gitanjali Group and some other diamond and jewelry merchants as suspects.

Thus, many Indian banks' overseas branches sanctioned forex credit. Banks charge a fee from the importer for the LoU.

The RBI decision could potentially push up the cost of imports by up to half a percentage point, besides putting foreign banks on an even keel with Indian banks in financing imports, bankers said.

Related News:



Most liked

Philadelphia Eagles release TE Brent Celek after 11 seasons
Burton etched his name into Philadelphia lore last month for his part in the "Philly Special" during Super Bowl LII. The Eagles are now strapped for cap space and will stand to save $4 million with Celek's release.

Verdasco upsets Dimitrov, Federer debut marred by rain
Djokovic scrambled to win the second set but looked rusty on stadium court, making 62 unforced errors compared to 29 for Daniel. After Federer, who is scheduled as second match of the day session, Sloane Stephens and Daria Kasatkina will face each other.

Marcus Smart Out Indefinitely With A Torn Tendon In His Right Thumb
If Smart is sidelined for an extended period of time (potentially into the playoffs), it would be a big hit to the Celtics. Smart will seek a second opinion this week to determine the severity of the tendon damage and whether surgery is needed.

Bengals bolster O-line in trade with Bills, move back in draft
This season will be the last in Glenn's deal before Cincinnati could potentially release him without taking a massive cap hit. Glenn played just five games previous year because of foot and ankle problems, so the Bills know how to play without him.

Video released of deadly courtroom shooting
Tenifa told the court about the gang's practices, including how boys as young as 9 are recruited and how they must put in "work". While Angilau's family decides if they will appeal the decision, their attorney is happy the public will at least see the video.

Karachi set to host Pakistan-West Indies T20Is
They will not play in Lahore but in Karachi. "That is how we intend to put Karachi back on cricket map once again". West Indies and Pakistan have signed an agreement to play a T20I series every year for the next 5 years.

Twitter Suspends Several Accounts Known for 'Tweetdecking'
Which exposed almost 700,000 people to propaganda in January over the course of the 2016 US Presidential Election. According to Buzzfeed , a number of these accounts were implicit with a practice known as " tweetdecking ".

Albert Wilson intends to sign with Dolphins
He signed a $12 million, two-year contract in 2017 after 10 seasons with the Pittsburgh Steelers. On the eve of free agency, the Dolphins released veteran linebacker Lawrence Timmons as expected.

Wealth Advisors LLC Takes Position in Occidental Petroleum Co. (NYSE:OXY)
ValuEngine cut shares of Occidental Petroleum from a "hold" rating to a "sell" rating in a research note on Thursday, March 1st. Old Mutual Customised Solutions (Proprietary) has invested 0.28% in Occidental Petroleum Corporation (NYSE:OXY). (NASDAQ:NSTG).

United States data breach victims can sue Yahoo
District Judge Lucy Koh ruled on Friday night that a class action lawsuit against Yahoo can move forward. That allowed them to create fraudulent cookies and manipulate results made in Yahoo's search engine.

Millennial 26-30 railcard website crashes due to huge demand
Commuters are urged to sign up to receive updates to ensure they don't "miss out" and be the "first to hear if more get released". The railcard is digital-only and is available to buy online or over the phone - it is unavailable for purchase at rail stations.

Tamil Nadu forest fire: Tourist guide arrested
Opposition parties blamed the government saying the forest fire was on for about a week and no steps were taken to put it out. Besides Theni , there were forest fires also in Ramakkalmedu and Pookkulam Mala sharing their borders with Kerala.

Iraq lifts ban on global flights to Kurdish airports
Around 25 million Kurds live in a territory that spans the borders of modern-day Turkey , Iraq, Syria , Iran and Armenia .

Confirmed! Sonam Kapoor to romance Dulquer Salmaan in Zoya Factor
Talking about Dulquer, Abhishek said: "I knew immediately that this was the boy we were looking for after I watched OK Kanmani ". Ealier, Sonam Kapoor had bought the rights for " The Zoya Factor " and Chauhan's another novel, "Battle for Bittora".

End of an era: Fashion designer Givenchy passes away
Givenchy was one of the gentlemen designers who started getting into the couture business after the war ended in Paris . Born into aristocracy, his famous clients also included Elizabeth Taylor, Jackie Kennedy and Princess Grace of Monaco.